LONDON (Reuters) – British consumers turned a little less pessimistic this month as the Bank of England’s latest interest rate cut led to an improvement in expectations for their household finances, according to a survey published on Friday.
The monthly consumer confidence index published by market research firm GfK edged up in February to -20 from January’s -22 which was the lowest since December 2023. A Reuters poll of economists had pointed to another reading of -22.
Confidence among consumers and businesses slid last year after the new government of Prime Minister Keir Starmer said it had inherited a troubled economy and finance minister Rachel Reeves raised taxes on employers to fund higher public spending.
Neil Bellamy, consumer insights director at NIQ GfK, said the BoE’s quarter-point cut to borrowing costs on February 6 had cheered up some people but most were still struggling with the high cost of living, especially rising utility bills.
“So, it’s no surprise that consumer views on the general economic situation are still lower than 12 months ago, suggesting that people don’t expect the economy to show any dramatic signs of improvement soon,” Bellamy said.
“Politicians looking for bright spots on the horizon will be disappointed,” he added.
The BoE halved its forecast for economic growth in 2025 to 0.75% earlier this month.
All five of the survey’s components improved, led by a four-point improvement in personal finance expectations for the next 12 months.
The poll of 2,011 Britons aged 16 and over took place between January 31 and February 13.
(Writing by William Schomberg; editing by David Milliken)
